Delphi Completes Flint West Consolidation

Plans finalized in last week help to improve U.S. competitiveness

TROY, Mich., Sept. 13 -- Delphi Corp. announced today the completion of consolidation activities of its Automotive Holdings Group Flint West, Mich. manufacturing operations, in line with the project's timeline announced in October 2003.

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All production has ceased at the Flint West facility. By the end of last week, all the site's remaining approximately 450 active employees had chosen to either retire, flowback or transfer to other opportunities within Delphi.

"We're pleased with this successful consolidation, which supports a critical cost reduction portion of our value-generation strategy," said Alan S. Dawes, Delphi vice chairman and chief financial officer. "While growth remains the leading part of our strategy, we are also challenged to reduce our legacy cost structure and we are on track to do so as we make our U.S. operations more competitive."

The Flint West consolidation, the largest of the four planned U.S. consolidations for 2004, complements Delphi's previously announced successes to improve its fundamental cost structure and overall global competitiveness. In addition, Delphi has closed five non-U.S. facilities this year. Through June 30, Delphi had already reduced its U.S. hourly headcount by 4,925 as compared to its original goal of 5,000 by year-end. The goal has since been adjusted to 5,500-6,000, and this consolidation puts Delphi well on track to achieving this revised objective.

"Consolidations are just a portion of Delphi's plan to improve the competitiveness of our U.S. operations," said Dawes. This spring Delphi finalized a competitive wage agreement with the UAW to hire new U.S. workers at an average all-in wage and benefit level of $24-25 an hour, compared to the all-in $60-70 an hour that it is currently paying.

"As we have communicated previously, this agreement is most helpful in bidding for future business," added Dawes. "The largest impact more likely will be in the latter third of this decade when the new business comes on line. Nevertheless, we have taken advantage of selective attrition and growth opportunities to begin the transition to a lower cost workforce at several sites with approximately 160 new employees on roll under this agreement."

While plant consolidations and the transition to a second-tier workforce are helpful to improving Delphi's U.S. competitiveness, Delphi is also managing its costs by aggressively implementing lean principles throughout its entire supply chain, successfully reducing its cost structure while improving performance, quality and delivery.

For more information about Delphi and its subsidiaries, visit Delphi's media room at http://www.delphi.com/media .

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